Monday, March 27, 2023

China’s business weakens after city shuts down to fight virus

BEIJING ( Associated Press) – China’s export growth fell in April as global demand weakened, adding to pressure on the world’s second-largest economy, as Shanghai and other industrial cities were closed to fight the virus outbreak Was.

Exports rose 3.7% to $273.6 billion from a year earlier, sharply lower than March’s 15.7% growth, customs data showed on Monday. Reflecting weak Chinese demand, imports rose 0.7% to $222.5 billion, down from the previous month’s growth rate of 1%.

Demand for Chinese exports is under pressure from high inflation and rising interest rates in the United States and other major markets, and consumer uncertainty about the economic outlook and job prospects.

Companies and investors are concerned by the ruling Communist Party’s “zero-Covid” strategy, which has temporarily closed most businesses in Shanghai and other industrial hubs will disrupt global trade and activity in the auto, electronics and other industries.

“The virus disruption continued to take its toll, but the main headwind for exports is weakening overseas demand,” Julian Evans-Pritchard of Capital Economics said in a report. “We expect export volumes to decline further in the coming quarters.”

Forecasters expect Chinese industrial activity to improve as infections ease this month, but President Xi Jinping last week reaffirmed Beijing’s commitment to “zero-Covid”, which is expected to boost manufacturing, retailing and sales. will burden the business.

Exports to the United States rose 9.5% to $46 billion despite tariff hikes in the battle for Beijing’s technology ambitions. Imports of US goods rose 0.9% to $13.8 billion.

China’s global trade surplus rose 19.4% to $51.1 billion, while the politically unstable surplus with the United States rose 65% to $9.8 billion.

China’s case numbers in its latest outbreaks remain relatively lowBut Beijing’s insistence on isolating every infected person kept most of Shanghai’s 25 million people confined to their homes. Access to Guangzhou, a manufacturing and trade center in the south and Changchun, an industrial center in the northeast, was suspended.

Authorities eased controls in Shanghai and allowed millions out of their homes, but restrictions tighten in Beijing and some other cities.

Managers at the world’s busiest Port of Shanghai say it is operating normally, but the figures they cite for daily cargo volumes are 30% below normal. Shippers say they are avoiding the port over concerns that there are not enough truck drivers available to carry their goods.

Auto factories and other manufacturers tried to continue operations by keeping employees at their facilities after they were forced to reduce or stop production as the supply of components was disrupted.

China’s economy grew at a weak 4.8% from a year earlier in the quarter ended March, up 4% from the last three months of 2021. Economists warned, however, that there will be more pressure on activity in the April-June quarter. Because of anti-virus control.

An official campaign to cut debt in China’s vast real estate industry, which supports millions of jobs, has dampened consumer demand for imports. This marked the beginning of an economic slowdown in the second half of 2021.

Weak sugar demand could have a global impact, with disappointing imports of oil, iron ore, industrial components and consumer goods.

Exports to the EU of 27 countries rose 8% to $43.1 billion, while imports of European goods rose 12.5 percent to $23.4 billion. China’s trade surplus with Europe rose 49.6% to $19.6 billion.

Imports from Russia, a major gas supplier, rose 56.6% to $8.9 billion from a year ago, possibly reflecting a jump in global energy prices due to supply disruptions caused by Moscow’s war on Ukraine.

Beijing has criticized trade and financial sanctions imposed on Moscow by the United States, Europe and Japan. But Chinese companies seem to be following them, trying to avoid potential pitfalls in transactions with Russia.


Nation World News Desk
Nation World News Desk
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